Question 1

How long do you expect to keep these hotel properties?

Accepted Answer

Ideally, we would like to sell each property after 5 years, but we want to have some flexibility to adjust to market conditions and have established a holding period of 5 to 7 years.

Question 2

What kind of compensation is the NLL and/or sponsor receiving?

Accepted Answer

Details on the sponsor compensation can be found in the Term Sheet; however, the following is a summary of industry standard sponsor/manager compensation:
Management Fee 3% of hotel gross revenues
Asset Management Fee: 0.5% of gross revenues
Acquisition Fee: 1% of purchase price
Disposition Fee: 1.5% of sale price

Question 3

When can I expect to receive my share of cash distributions?

Accepted Answer

Cash distributions will be made quarterly and you can expect to receive your distribution within 30-45 days following the end of each calendar quarter.

Question 4

Will you be providing me with reports and information needed for filing my tax returns?

Accepted Answer

On or about March 1st each year we will be providing you with year-end financials along with a Schedule K-1 needed for filing your tax returns. We also will be providing reports periodically on the performance of the property along with any other important information we feel might be of interest to our investor partners.

Question 5

Have you made allowances for property upgrades and PIP work?

Accepted Answer

Yes, we do. First, we include in our acquisition cost funds for all brand mandated remodeling and PIP work. In addition, we set aside 4% of gross revenues in a replacement reserve fund which will be utilized for capital expenditures during the property holding period.

Question 6

Will the sponsor (National Lodging & Leisure) be investing any of their money in these properties?

Accepted Answer

Yes, an affiliate of National Lodging & Leisure (NLL Group, LLC) will be co-investing alongside our investor partners an amount up to 10% of the total equity amount for each property acquired.

Question 7

Is this investment suitable for a 1031 Exchange?

Accepted Answer

Yes, our investment properties are an excellent option for someone involved in a 1031 exchange transaction. Please contact us for additional information and instructions.

Question 8

Why are you focusing only on Florida?

Accepted Answer

For several reasons: Florida has consistent population and business growth; a low tax, pro-business environment; many diversified room demand generators; high barriers to entry for competition; a drive-to vacation destination for almost one-third of the country; higher average occupancy rates; and, a history of success in the hospitality sector.

Question 9

How risky is this investment?

Accepted Answer

While it’s impossible to accurately determine risk, the fact that historically less than 0.5% of premium branded hotels fail in this country (Source: SBA), and that we will only be acquiring top-tier select-service branded hotels, and that we will only be purchasing properties with successful track records, we believe place our investment properties in the low risk category.

Question 10

Do you have prior experience with these kinds of investments?

Accepted Answer

Yes. The principals of NLL have completed over 50 private equity placements like this over the past twenty years and have extensive experience in equity and long-term debt placement.

Question 11

What happens to my investment if you are unable to acquire a hotel(s)?

Accepted Answer

The escrow agreement provides that in the event we are unable to acquire a hotel property that meets our criteria and approval by our investors within six (6) months from date specified in the escrow agreement, we will return your funds to you, plus any accrued interest.

Question 12

Can I sell my interest or ownership units at any time? How liquid is this investment?

Accepted Answer

By its nature, real estate is a non-liquid investment. However, we know that events do happen that might require the sale of an investor’s interest. Accordingly, if such an event were to occur, we will work with such investors to accommodate their needs.

Question 13

Will you be offering the investors any perks?

Accepted Answer

Yes. Investors will have the opportunity to book rooms at our hotels at our “owner rate” of $25 per night. Naturally, some restrictions will apply and details on this can be found in the Term Sheet.

Question 14

What makes you different from other hotel investment options?

Accepted Answer

A couple of things make us different. First, the management of NLL brings over 175 years of experience to the table.  We just don’t buy hotels and then operate them as previous owners have – we improve and finetune the performance of the asset in order to increase cashflows. In the industry it’s known as “value-add investing” and it’s something we have done for years and are especially good at. We apply better hands-on management techniques and make physical improvements that allow our properties to operate at higher occupancy and daily room rate levels.  And we do this in a cost-effective manner in that all the skills necessary to execute our plans is housed within the management team.  We don’t have to hire outside people to do the work – we do it ourselves.  
 
We also run a very lean (cost effective) management team. We don’t waste our investor’s money on unnecessary bells and whistles. Since we co-invest with you in all our transactions, your money is our money.

Question 15

What makes you different that some of the Non-Traded Real Estate Investment Trusts?

Accepted Answer

There are quite a few differences.  Second, we will only be acquiring properties that will generate much higher returns (12% to 15% cash on cash), versus REIT’s average returns in the 6% to 9% range. And third, our investments will have a substantial capital appreciation component, sometimes totally missing from most REIT’s. All you receive from most private REIT’s is a coupon return. Period.

Frequently asked questions

How long do you expect to keep these hotel properties?

What kind of compensation is the NLL and/or sponsor receiving?

When can I expect to receive my share of cash distributions?

Will you be providing me with reports and information needed for filing my tax returns?

Have you made allowances for property upgrades and PIP work?

Will the sponsor (National Lodging & Leisure) be investing any of their money in these properties?

Is this investment suitable for a 1031 Exchange?

Why are you focusing only on Florida?

How risky is this investment?

Do you have prior experience with these kinds of investments?

What happens to my investment if you are unable to acquire a hotel(s)?

Can I sell my interest or ownership units at any time? How liquid is this investment?

Will you be offering the investors any perks?

What makes you different from other hotel investment options?

What makes you different that some of the Non-Traded Real Estate Investment Trusts?

Contact

Frequently asked questions

How long do you expect to keep these hotel properties?

What kind of compensation is the NLL and/or sponsor receiving?

When can I expect to receive my share of cash distributions?

Will you be providing me with reports and information needed for filing my tax returns?

Have you made allowances for property upgrades and PIP work?

Will the sponsor (National Lodging &amp; Leisure) be investing any of their money in these properties?

Is this investment suitable for a 1031 Exchange?

Why are you focusing only on Florida?

How risky is this investment?

Do you have prior experience with these kinds of investments?

What happens to my investment if you are unable to acquire a hotel(s)?

Can I sell my interest or ownership units at any time? How liquid is this investment?

Will you be offering the investors any perks?

What makes you different from other hotel investment options?

What makes you different that some of the Non-Traded Real Estate Investment Trusts?

Contact

Will the sponsor (National Lodging & Leisure) be investing any of their money in these properties?